Farmer notes that data from market research firm NPD for the first three weeks of December suggest very strong demand for iPods in the December quarter; he raised his forecast for iPod sales in the quarter to 17 million from 15.5 million. He raised his December quarter estimates to $6.5 billion in revenue and profits of 81 cents a share, from $6.3 billion and 77 cents.
As for Macworld, Farmer has a few theories on what will be announced:
- He notes that Jobs previewed better-than-expected iPod results at Macworld last year, and says “we would not be surprised to see the same this year.”
- At a minimum, he expects a demonstration of new feature in Mac OS Leopard, “possibly including a virtualization implementation of the current Boot Camp feature which allows the use of both Mac OS and Windows.”
- An update on the iTV product “is likely,” he says.
- New Mac Pros and displays “are also possible.”
- He says there could be previews of a wide-screen video iPod; new “ultraportable” Macs; and the much-discussed Apple cell phone. “However, we would be surprised to see detailed information on all of these areas,” he writes.
- New digital content partnerships “would not be a surprise.”
Meanwhile, Shaw Wu, of American Technology Research, issued a bullish note on Apple today, repeating his Buy rating and $99 price target. He set a fiscal 2008 estimate of $28.1 billion in revenue and profits of $3.50 a share, which he notes is above the consensus view of $27.8 billion and $3.28. For the fourth quarter, he sees revenue of $6.4 billion and profits of 79 cents a share.
In another note today, Needham’s Charlie Wolf took a close look at what the Apple phone might do beyond playing music. “If the company is true to its mission of simplifying the user experience through better software - as exemplified by iTunes - it will position the iPhone as a more robust peripheral that’s managed by application software on a computer,” he writes. “Apple can design the phone as a dumbed down device,much like the iPod, winning on ease of use in competition with mobile phones whose services are managed on the phone itself.”
Wolf also notes that he expects Apple to sell the phone as an unlocked device through the Apple Stores, allowing people to choose their own carrier.
“It’s foolish to model the iPhone until Apple reveals the details of its design, distribution and pricing,” Wolf writes. “However, if we’re close in our conceptual assessment of the device, it has the potential to reach beyond the installed base of iPod users to a larger audience who are frustrated with the difficult to use software and services on most mobile phones today.”
Apple shares today have gained 67 cents to $85.51.